Landlords: Watch Out For This £200 Fine!: UK Property Shop News

Energy Performance Certificates (EPCs) detailing the energy efficiency of a property become compulsory on rented property from 1st October . An EPC is currently valid for 10 years and can be reused as many times as required within that period.

Landlords do not have to commission a new EPC each time a new tenancy starts but they are required to give a copy of the latest EPC to new tenants.

The bad news
Any landlords renting out a property must provide prospective tenants with one of these EPCs or face a fine of £200 and be unable to market or rent out their property..

The good news
Over a quarter of landlords (27%) surveyed by Paragon Mortgages said they are planning to obtain an EPC before the 1st October deadline.

EPC offer landlords an advantage over their peers that have less energy efficient properties. Landlords with the most energy efficient homes could result in more interest from tenants. Those whose properties rate badly could face a lack of interested tenants and subsequent fall in rental income.

The EPC not only provides details of the energy efficiency and the properties environmental impact, it also provides estimated running costs, information which will now factor in tenants' decision making process, and could be used as a bargaining tool if the home has received a poor rating.

In other words, if your property is energy-efficient, an EPC could give you an advantage over other landlords.

What is the point of an EPC?

While measures which could be taken to improve the property's energy efficiency and environmental impact rating are highlighted in the certificate, landlords are not obliged to make any of the changes suggested on the EPC.

How much does an EPC cost?

This can vary - the Nationwide subsidiary The Mortgage Works announced last week that it is offering free EPCs to landlords to help them comply with legislation.

The Lender, in conjunction with Energy Reports and Surveys Limited, will offer landlords who are remortgaging on selected products a free energy performance certificate (EPC). The package also includes free legal fees and a free valuation.

The National Landlords Association will provide landlords with EPCs for £69 including VAT per certificate.

And Paragon Mortgages, which is offering the certificates for £85 each, has produced an interactive guide for landlords on EPCs: 'The Landlords' Guide to EPCs'.

Wait and see

Like the majority of landlords, you may intend to wait until your existing tenant leaves before you get an EPC however you may not be allowed to market your property. The only way to be in a position to move quickly is to have the EPC already in place. And remember the £200 fine can be issued an unlimited number of times, not just once.

Risky and reckless

Finally, Paragon Mortgages' survey also noted that with just one week to go, 81% of landlords hadn't obtained an EPC for any of their rental properties, with only 5% having obtained the certificates for all of the properties in their portfolio. The National Landlords Association (NLA) has said that the total amount of fines for UK landlords could exceed £500m.

A further 8% of landlords are prepared to take the risk and wait until an enforcement officer contacts them before obtaining the EPC, and a reckless 11% of respondents said they had no intention of obtaining an EPC for any of their properties.

Getting a good rating with low running costs will make your property stand out to cash-strapped tenants and that could mean the difference between letting the property quickly or facing a lengthy void period. In other words, the certificate could pay for itself.